TIM eMagazine Vol.3 Issue 8
in total volumes of 3.8% up to 2023.
On the supply side, after five years of decelerating growth, 2017 saw a
small pick-up in world fleet expansion. During the year, a total of 42 million
gross tons were added to global tonnage, equivalent to a modest 3.3%
growth rate.
Looking at the shipping value chain, Germany remained the largest
containership-owning country with a market share of 20% at the
beginning of 2018, although it lost some ground in 2017. In contrast,
owners from Greece, China and Canada expanded their containership-
owning market shares.
Meanwhile, in 2018, the Marshall Islands emerged as the second largest
registry, after Panama and ahead of Liberia. More than 90% of shipbuilding
activity in 2017 occurred in China, the Republic of Korea, and Japan,
while 79% of ship demolitions took place in South Asia, notably India,
Bangladesh and Pakistan.
Key drivers of change
Liner shipping consolidation, technological advances, and climate
change policy are key drivers of change in global shipping, the report says.
Consolidation activity in liner shipping continued unabated: the liner
shipping industry witnessed further consolidation through mergers and
acquisitions and global alliance restructuring.
As of January 2018, the Top 15 shipping lines accounted for 70.3% of
all capacity. Their share has increased further with the completion of
the operational integration of the new mergers in 2018, with the Top 10
shipping lines controlling almost 70% of fleet capacity as of June 2018.
Three global liner shipping alliances dominate capacity deployed on the
three major East-West container routes, collectively accounting for 93%
of deployed capacity. Alliance members continue to compete on price
while operational efficiency and capacity utilization gains are helping to
maintain low freight-rate levels. By joining forces and forming alliances,
carriers have strengthened their bargaining power vis-à-vis the seaports
when negotiating port calls and terminal operations.
Growing consolidation can reinforce market power, potentially leading
to decreased supply and service quality, and higher prices. Some of these
negative outcomes may already be in effect. For example, in 2017–2018,
the number of operators decreased in several small island developing
States and structurally weak developing countries.
“There is a need to assess the implications of mergers and alliances and
of vertical integration within the industry, and to address any potential
negative effects. This will require the commitment of all relevant parties,
notably national competition authorities, container lines, shippers and
ports,” Shamika N. Sirimanne, Director of UNCTAD’s Division on Technology
and Logistics, said.
Technological advances
Port traffic volumes picked up speed: global port activity and cargo
handling expanded rapidly in 2017, following two years of weak
performance. UNCTAD estimates that 752 million twenty-foot equivalent
units were moved at container ports worldwide in 2017. The outlook for
global port handling activity remains positive supported by projected
economic growth and port infrastructure development plans.
Port operations, performance and bargaining power continued to
be defined by mega-ship deployment and alliance restructuring: Liner
shipping alliances and vessel upsizing have made the relationship
between container shipping lines and ports more complex and triggered
The warning comes against a background of an improved balance between demand and
supply that has lifted shipping rates to boost earnings and profits. Freight-rate levels improved
significantly in 2017 (except in the tanker market), supported by stronger global demand, more
manageable fleet capacity growth and overall healthier market conditions.
new dynamics where shipping lines have a stronger bargaining power and
influence.
Increases in the size of vessels and the rise of mega-alliances have
heightened the requirements for ports to adapt. While liner shipping
networks seem to have benefited from efficiency gains arising from
consolidation and alliance restructuring, for ports, the benefits did not
evolve at the same pace. This dynamic is further complicated by the
shipping lines often being involved in port operations which in turn could
redefine approaches to terminal concessions.
The report says that global ports and terminals need to track and
measure performance as port performance metrics enable sound strategic
port planning, investment and decision-making.
Technological advances in the shipping industry, such as blockchain
applications, cargo and vessel tracking, autonomous ships, and the
Internet of Things, hold opportunities for the global shipping industry.
However, there is still uncertainty within the maritime transport industry
regarding possible safety, security and cybersecurity incidents, as well as
concern about negative effects on the jobs of seafarers, most of whom
come from developing countries.
The climate change agenda remains a priority. The shipping industry
must reduce greenhouse gas emissions, the report says, welcoming
among international efforts the April 2018 adoption by the International
Maritime Organization (IMO) of an initial strategy aimed at reducing by at
least half the total annual emissions from ships by 2050 compared to 2008.
The IMO strategy identifies potential short-, mid- and long-term further
measures with possible timelines, and their impacts on States, highlighting
the need to pay attention to the needs of developing countries, especially
small island developing States and least developed countries.
Depending on the outcome of negotiations and the specific design of
any future instrument, it will be important to assess the related potential
implications for carriers, shippers, operating and transport costs as well as
the cost of trade. It will also be important to assess the benefits associated
with these measures, including market-based instruments in shipping
and how these could be directed to address the maritime transport
and logistics challenges facing developing countries, the report says.
https://unctad.org
•Review of Maritime Transport 2018 : https://unctad.org/en/pages/
PublicationWebflyer.aspx?publicationid=2245
•UNCTAD Liner Shipping Connectivity Index (2004-2018) : https://unctad.
org/en/pages/newsdetails.aspx?OriginalVersionID=1865&Sitemap_x0020_
Taxonomy=UNCTAD%20Home;#1721;#Transport;#2170;#Transport,%20
Climate%20Change%20and%20Maritime%20Transport
•Market Consolidation in Container Shipping: What Next? : https://unctad.
org/en/pages/PublicationWebflyer.aspx?publicationid=
29